Palmer: Taxpayers overpaid by millions to prevent more Liberal dirty laundry from being aired in court

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VICTORIA - After months of delay, the B.C. Liberals finally released Tuesday a trio of evaluation reports that predated their $30-million payout for the cancelled Boss Power uranium mining claim.

The pictured painted by the 800 or so pages of documentation was not a pretty one for taxpayers, giving the appearance that the government had overpaid by as much as $21 million to keep the proceedings out of court.

The case goes back four years to the Liberal decision to impose a moratorium on uranium mining in B.C. and a claim for compensation by Boss Power, the Vancouver-based owner of the Blizzard property southeast of Kelowna.

The first evaluation to be released Tuesday was commissioned by the government after the company went to court. It pegged the value of the claim in the $4-million to $7-million range. The second, commissioned by the company, offered a sky’s-the-limit evaluation of almost $100 million.

The third, and the eyebrow-raiser as regards the conduct of the Liberals, came from an independent evaluator, acting as a friend of the court in assessing the other two evaluations.

“I am aware that I have a duty to assist the court and not to be an advocate for any party,” wrote Keith Spence, a Toronto-based expert in investment banking and the financing of mining projects. “I have prepared this report in conformity with that duty.”

He found the company-commissioned evaluation to be “comprehensive and in many cases quite thorough.” But over-reliant on a 30-year-old technical assessment that was itself lacking in “any evaluation to assess the project’s economics.” Consequently, it “may have overstated the value of the project.”

The evaluation commissioned by the government he found to be “well thought out, thorough ... the methods used for the evaluation are appropriate and the conclusions logical.” He viewed it “with a higher level of confidence.”

Still, in fairness, he had to concede that “wherever there was doubt,” the government evaluator had come down on the “conservative” side. Consequently Spence preferred the high-end evaluation from the report, plus “a discretionary premium of 30 per cent” to further compensate for all the lowballing.

“This would be $8.7 million.”

There it was on the court record, filed in May of last year, and backed with all the authority of an independent expert who had no duty other than to assist the court in sorting out the competing evaluations.

Nevertheless, just as the Boss Power claim was about to be heard in B.C. Supreme Court last October, the B.C. Liberals opted to settle for $30 million, $21.3 million more than recommended in the independent evaluation.

How did the B.C. Liberals manage to “wrestle the company to the ceiling” on compensation, as Opposition energy critic John Horgan put it during question period Tuesday?

No plausible explanation was forthcoming from Energy Minister Rich Coleman. He told the house the Liberals had acted on internal legal advice, then segued into a beside-the-point exhumation of various NDP sins from the 1990s.

But the settlement, executed on the proverbial steps of the courthouse, ensured that there would be no witnesses called in connection with the extraordinary contents of a government affidavit that came to light only after the fact.

The court filing (“which the defendant makes unconditionally”) described what happened after Boss Power applied to begin developing its claim in the spring of 2008, before the cabinet decision to impose its moratorium.

Normally, the inspector of mines would give such an application due consideration, then decide whether to reject, accept or accept it with conditions.

Instead higher-ups in the energy and mines ministry ordered the inspector to give the application no consideration whatsoever.

Those orders stood even after the ministry of the attorney-general countered that “the inspector had a statutory obligation to consider the notice of work on its merits and that a failure to do so would be a breach of his statutory duty.”

The inspector was then relieved of his responsibilities and those responsibilities were passed to other employees of the ministry, who then gave no consideration to the merits of the application from Boss Power.

Lastly, the government admitted that the official who gave those orders “knew that he did not have the authority to take the action and he took the action anyway.”

The mines inspector ordered to disregard his statutory obligations. Advice from the ministry of the attorney-general disregarded as well. An official relieved of his responsibilities, apparently after he balked at an illegal order.

All this from the government’s own statement of facts, filed in court.

Though the Liberals flatly refuse to discuss the contents of that astonishing confessional, neither have they disavowed it, other than to indicate that the officials involved did nothing wrong and there’s more to it than can ever be discussed publicly.

The out-of-court settlement of course ensures that the full story never will be told. All of which leaves taxpayers on the hook for maybe $20 million more than necessary to prevent another load of Liberal dirty laundry from being aired in open court.

vpalmer@vancouversun.com

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Palmer: Taxpayers overpaid by millions to prevent more Liberal dirty laundry from being aired in court

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